The WSJ recently presented data suggesting that United Airlines was not covering its costs on flights from San Francisco to Washington D.C. The article quoted analysts saying that United should discon- tinue this service. The costs per flight (presented in the article) included the costs of fuel, pilots, flight attendants, food, etc. used on the flight. They also included a share of the costs associated with running the hubs at the two airports, such as ticket agents, building charges, baggage handlers, gate charges, etc. Suppose that the revenue collected on the typi- cal United flight from San Francisco to Washington does not cover these costs. Does this fact imply that United should discontinue these flights? Explain
The WSJ recently presented data suggesting that United Airlines was not covering its costs on
flights from San Francisco to Washington D.C. The article quoted analysts saying that United
should discon- tinue this service. The costs per flight (presented in the article) included the costs
of fuel, pilots, flight attendants, food, etc. used on the flight. They also included a share of the
costs associated with running the hubs at the two airports, such as ticket agents, building
charges, baggage handlers, gate charges, etc. Suppose that the revenue collected on the typi- cal
United flight from San Francisco to Washington does not cover these costs. Does this fact imply
that United should discontinue these flights? Explain
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